Key points
Japan’s Nikkei share average saw a modest recovery on Monday, with the index rising by 0.21% to 40,999.80 by the midday break. In contrast, the broader Topix index dipped by 0.13% to 2880.32.
SEE: Nikkei sees recovery after profit-taking on the VT Markets app.
This movement comes after both main stock indexes touched fresh all-time peaks last week, prompting market participants to secure profits.
The benchmark Nikkei index experienced a sharp rise last week, hitting an all-time intra-day high of 41,100.13 on Friday, while the Topix reached a record peak of 2,906.80. Such peaks often lead to a phase of profit-taking, and this time was no exception.
Trader sentiment was somewhat bolstered by firmer Wall Street stock indexes at the end of last week, influenced by softer-than-expected U.S. labor data. However, this boost was insufficient to drive Japanese shares higher on Monday.
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Market players remain cautious ahead of potential risks this week, particularly regarding interpretations of Federal Reserve Chair Powell’s testimony and upcoming U.S. inflation data.
Among the Nikkei’s 225 constituents, 83 shares advanced while 139 declined. SoftBank Group (9984) notably gained 2.4%, providing the biggest lift to the Nikkei.
This rise followed the surge of U.S.-listed shares of British chip designer ARM Holdings (ARM), in which SoftBank holds a 90% stake, reaching an all-time high. On the other hand, Yaskawa Electric (6506) fell by 3.6% after its latest revenue results disappointed investors.
It is probable that the performance of Japanese equities will likely be influenced by further economic data from the U.S. and any changes in market expectations regarding the Federal Reserve’s policy.
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